Wednesday, July 16, 2014

Bank Shorts Orchestrating Gold & Silver Smash

The central planners today won another battle in the precious metal arena, Eric. They got the short sellers to dig in their heels over the past few days, which is clear from the increase in the open interest on the Comex, particularly for silver....

If we look at what happened last week, approximately 21% more silver was sold short on the Comex than was actually mined in those 5 days. The Comex open interest increase in gold was about 88% of all the gold mined those five days.

When comparing how much gold and silver were sold short than was actually mined, it only takes logic to conclude that it was paper selling that stopped gold and silver’s price advance last week. And these results are only for the Comex, which is generally said to represent just 10% of paper derivative trading in silver and gold.

Clearly, the paper sellers were out in full force last week. They were trying to keep gold and silver prices capped. Nevertheless, from Monday to Friday’s close, gold rose 1.6% while silver jumped 2.1%. But these shorts turned the tide in their favor early this morning.

Before Europe opened, the paper sellers were out in full force painting the tape with short selling during the most illiquid time of the day. By the time the metals opened for trading in New York, the spec longs were ready to be flushed out. Also, because precious metal prices today broke below their short-term moving averages, the black-box proprietary traders had to flip their positions from long to short. The selling pressure on gold and silver prices was relentless.